Consumers in the U.S. are increasingly refraining from purchasing sodas, influenced by the popularity of weight loss medications and non-alcoholic beverages. Despite this trend, Coca-Cola reported strong second-quarter earnings, boosted by robust global demand for its products, leading the company to revise its full-year forecast upward.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance: “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
However, in North America, the company saw a 1% decline in volume sales during the quarter. Quincey attributed this drop to a slowdown in “away-from-home channels,” which encompass its range of water, sports drinks, coffee, tea, and sodas. This decline was somewhat mitigated by the success of its Fairlife milk and its flagship soda, Coca-Cola, both of which recorded significant retail sales growth.
To combat the downturn, Coca-Cola is collaborating with fast-food chains to integrate its sodas into combo meals. The company is reportedly working with McDonald’s to enhance the fast food chain’s $5 meal deal that includes a soft drink.
Coca-Cola’s performance surpassed Wall Street predictions. The beverage giant recorded $12.4 billion in revenue for the second quarter, amounting to about $0.84 per share, exceeding forecasts of $11.76 billion in revenue at approximately $0.81 per share.
The company has now adjusted its organic revenue growth expectations to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly favoring products that promote weight loss and healthier lifestyles. A recent Gallup poll indicates a significant decline in alcohol consumption among young adults in the U.S. Earlier this July, Pepsi cited a series of product recalls as contributing to its lackluster performance in the second quarter.